The omnichannel future
Consumers are increasingly telling brands and retailers that they want seamless, hassle-free shopping and payment, whether online or offline
Consumers in the digital world are rapidly driving demand for easier ways to shop, especially in mobile-mad Asia. Easy means anytime, anywhere, while accepting all types of payments. That's where omnichannel comes in, derived from the Latin prefix omni meaning all or universal.
For a retailer or a brand, omnichannel means that your mobile apps should match the design of your website, which in turn reflects the look inside the store. And all these channels should work together in a seamless way in terms of product selection, pricing, payment options, returns and more.
For example, a customer might see a product on her phone in the morning, visit the store to check it out in person on her lunch break, and finally decide to buy it on her desktop computer at home in the evening because she feels safer there. Customers want all of these options in one form or another.
"The move toward omni is what our clients are looking for … and brands are definitely moving into a more customer-centric space at the moment," Jerry Smith, chief operating officer of Ogilvy Asia told Asia Focus on the sidelines of Meet Magento Asia, held in Bangkok by SmartOSC, a global e-commerce agency.
Mr Smith, a pioneer in internet marketing, says brands that focus on great customer experiences can be up to four times more valuable than others in their peer group. But brands are built over time so you need a good brand platform, he added.
"Brands need to work out the ecosystem and connect to the ecosystem," he said. "Part of the issue that a company faces is how does it get the technology and the organisation itself transformed, and how do they transform the way they connect and create value exchange with their consumers, whether it is on or offline"
While China is leading the omnichannel bandwagon in creating better experiences for consumers, other developing Asian nations are not far behind. And while people debate who pioneered online-to-offline (O2O) -- Alibaba's More Mall or Amazon Go -- Mr Smith says what really matters is whether the consumer is having a great relationship with that brand.
Bhavin Patel, the omnichannel director of Kanmo Retail Group and an avid believer in O2O, says their is no single approach to "omniness", as omnichannel strategies are actually "different by country, different by business and different by organisation".
For the banking industry, omnichannel may mean that a customer can use a phone to get cash at the bank, and in another country it can mean an app where the customer can log in to their account and transfer money. In retail, Mr Patel sees Europe as a pioneer in the omnichannel field as retailers there have been offering e-commerce for a long time. Mr Patel previously worked with L'Oréal, Tesco, Marks & Spencer, Burberry and Saatchi before joining Kanmo, the second largest retail group in Indonesia. At Tesco, he was in charge of launching e-commerce in nine markets in central Europe and Southeast Asia in less than two years, including Thailand's first omnichannel retailer in 2015. But customers in the kingdom were "not ready for it" back then.
"There were so many challenges," he recalled, among them trust in payment, as customers still wanted to pay cash on delivery, something Tesco has never done in any market. "If we had to do it (omnichannel) now, it would have been received a lot more easily."
Thai-Son Nguyen (left), general director and co-founder of SmartOSC, and Bhavin Patel, omnichannel director of Kanmo Retail Group, at Meet Magento in Bangkok. Photo: Supplied/SmartOSC
What Tesco wanted to do is to allow Thai consumers, no matter where they are, to do grocery shopping from home and get delivery to their doorsteps to save time and fuel caused by traffic congestion, especially in Bangkok. This despite the fact that Tesco already has more than 2,000 physical stores in a variety of sizes and formats across Thailand.
Mr Patel says some companies want to go O2O because it is right for their business and some prefer a multichannel strategy, but he believes omnichannel is "definitely the future" because it's what customers want.
Both multi- and omnichannel involve selling across multiple online and offline channels. However, the key difference is how the customer experience is linked. Traditional multichannel retailers may have a website and physical stores but the two channels have very little or no connection between each other.
The online and offline channels are almost treated as separate businesses with different product selection and policies. Sometimes items purchased in stores, and online purchases can only be exchanged online. This separation creates headaches for buyers, but omnichannel makes this pain go away.
"Omni or multi does not mean anything to a customer," he said. "Customers just want to buy something as fast as possible and they want it at the same price regardless of what channel they are looking at."
But retailers in each country need to listen very closely to what their customers want before they adopt a bold new strategy, "because if we try to push it, it is not going to work", he said.
Thai-Son Nguyen, general director and co-founder of SmartOSC, said levels of e-commerce maturity differ across different countries. Most retailers in Vietnam and Thailand, in his view, still do not understand the true meaning of omnichannel.
"Omnichannel is a sexy word and everyone wants to do the same thing but it's not just about the technology," he said. "There is a lot more to it than that and it all starts by building that core team first."
Mr Nguyen cautioned that "going omni" is not a three-month project and it is not suitable for every business. It may be best suited to retailers with a big physical presence of more than a hundred stores.
"You have to look where the touchpoints are first, where are you getting your customers from, to be able to say yes, it is suitable for me. Find out if your customers are going to the stores or coming from social media to find your main touchpoints in order to choose your channels wisely."
Mr Patel said that when one starts a business, e-commerce might be a cheaper option. But an established company that is already a purely online player might want to look at offline, such as what Amazon is doing with supermarkets and bookstores in the US.
"If you start too small and you're a big business, you're in trouble. If you start too big and you're a small business, you're in trouble," he added. "You have to know what your customers want, then pick the channels because there are so many channels, from e-commerce, B2B or me-to-you, with simple apps that can simplify traditional trade to make your life easier."
For example, someone selling make-up in Bangkok might want to start an engagement channel with customers through social media such as Instagram, which works really well in Southeast Asia. As demand gets bigger, you can then move on to e-commerce, a mobile application and finally O2O to provide more options for customers.
"Jumping straight to [omnichannel] without a solid strategy is a big risk," he said.
Apart from O2O, Mr Patel is also excited about the development of biometrics technology in retail.
"Facial ID has been made available by Apple and now Android devices are doing the same. So now that the customer expectation is to be able to unlock their phone with their face, then why can't they pay with their face?" he asked rhetorically.
This is already happening in the United Kingdom where passengers on the London Underground no longer want to carry an Oyster Card when they already have it on their phone. It now accepts Apple Pay using fingerprint ID.
"Because I have an iPhone X, I don't need to use finger ID because I am already using face so this is actually happening in wireless payment already," said Mr Patel.
"Is it going to happen? Absolutely. … If consumers are using something every day and are getting used to it, and if the consumers are asking for it, service providers and retailers must be able to integrate with it."
According to Oracle's "New Topography of Retail" study, mobile-mad emerging markets appear to be more ready for a digital retail experience including in-store facial recognition, virtual sales assistants and kiosks that provide product re-commendations. It said 61% of consumers in these markets believe using facial recognition to ensure purchase security is a good idea compared with only 26% in developed markets.
The Singaporean company Le Tach now has 400 vending machines that support payment with facial recognition and expects to have 1,000 deployed in the city-state in the near future. Its competitor, Ocotbox, aims to add 100 more vending machines with biometric palm scanning for payments in Singapore by June.
Goode Intelligence, a London-based identity and biometrics research and consulting group, has forecast that 2.6 billion people will use biometrics for payments by 2023. This reflects demand for frictionless authentication in all channels, the need to reduce payment fraud, regulation at both the state and industry level, and technology standardisation, it added.